Morning Commentary: Sterling Bancorp offers fixed-to-floaters; Steel Dynamics firms

By Cristal Cody

Tupelo, Miss., Dec. 11 – One investment-grade company is marketing registered notes on Wednesday.

Sterling Bancorp launched a $200 million offering of 10-year fixed-to-floating rate subordinated notes (expected ratings Kroll: BBB) over the morning. The notes are non-callable for five years.

Investment-grade supply so far this week totals more than $4.5 billion, near the $5 billion to $10 billion range syndicate sources forecasted.

Market activity was expected to be fairly quiet in front of the Federal Reserve’s monetary policy rate decision due at 2 p.m. ET on Wednesday, sources said.

No additional rate cuts are expected following the Federal Reserve’s three previous rate cuts earlier this year, sources said.

Meanwhile, new issues priced this week have traded mostly better in the secondary market, a source said.

Steel Dynamics, Inc.’s $1 billion two-part offering of fixed-rate senior notes (Baa3/BBB-/BBB) that priced tighter than guidance on Monday traded more than 5 basis points better in the secondary market, a source said.

The company’s 3.45% notes due April 15, 2030 were seen 8 bps tighter in the 157 bps area.

Steel Dynamics sold $600 million of the notes on Monday at 99.736 to yield 3.481% and a Treasuries plus 165 bps spread. Price guidance was in the 175 bps spread area, plus or minus 5 bps.

High-grade secondary market volume this week includes $21.24 billion of corporate bonds traded on Tuesday and $18.23 billion on Monday, according to Trace data.

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